Chapter 4
Current Liabilities
202
AP-18B (
2
5
7
)
During 2017, FitnessFirst Ltd. had the following transactions.
Feb 1 Borrowed a five-year loan for $150,000 with an interest rate of 5% per annum.
Annual principal payment of $30,000 and interest is payable at the end of January.
Mar 1 Sold 100 three-month club membership to customers for a total $6,000 cash.
Regardless of the number of times a customer visits the club, the monthly
memberships are not refundable.
Mar 31 Recorded revenue earned from the March 1 transaction.
Apr 14 Purchased treadmills worth $20,000 from RunRun Company, on account.
Apr 30 Recorded revenue earned from the March 1 transaction.
May 25 Received utilities bill for $1,000, to be paid within 30 days.
May 31 Recorded revenue earned from the March 1 transaction.
Jun 14 Paid $10,000 cash to RunRun Company to reduce the balance owing.
Jun 24 Paid the utilities bill received on May 25.
Sep 1 Received $10,000 cash from customers for the sale of one-month memberships.
Once the customer has paid the membership fees, it cannot be refunded.
Prepare journal entries to record the above transactions during 2017. FitnessFirst Ltd. has a
year-end of December 31.
Date
Account Title and Explanation
Debit
Credit
